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Thursday, January 4, 2018

GWPF Newsletter: U.S. Shale Oil Production Booms As New Year Begins








Shale Revolution Helps Rewrite The Global Geopolitical Playbook

In this newsletter:

1) Terence Corcoran: The Population Bombers Keep On Bombing — And 50 Years On They Keep Getting It Wrong
Financial Post, 3 January 2018
 
2) Hail Shale: U.S. Oil Production Booms As New Year Begins
The Washington Post, 31 December 2017


 
3) UK Shale Development To Begin In Earnest In 2018
Steel Guru, 28 December 2017
 
4) Shale Revolution Helps Rewrite The Global Geopolitical Playbook 
Asia Times, 5 November 2017
 
5) Green Madness: Russia’s Grip On Anti-Fracking Europe Tightening
OilPrice.com, 1 January 2018
 
6) Christopher Booker: No, Wind Power Is Not The Cheapest Form Of Energy
The Sunday Telegraph, 31 December 2017
 
7) John Constable: Policy Determinism And Reform Of The International Energy Agency
GWPF Energy, 1 January 2018


Full details:

1) Terence Corcoran: The Population Bombers Keep On Bombing — And 50 Years On They Keep Getting It Wrong
Financial Post, 3 January 2018

Half a century after publication of The Population Bomb, the world is healthier, better fed, less poor, better entertained and generally living fuller lives


 

It’s 2018, and the end is near — again. From the new Matt Damon movie Downsizing to the latest alarmist petitions from bands of scientists, the world is said to be careening toward destruction. “We’re screwed,” says Oscar-winning director Alexander Payne, whose Downsizing explores the science-fiction idea that the world could maybe be saved if the technology existed to shrink individual humans down to the size of Ken and Barbie dolls, at which point consumption of dwindling earthly resources would be reduced to a fraction of current levels.

If you’re not keen on taking science lessons from Hollywood directors who admit they have no idea of how to avoid the alleged looming catastrophe, there’s the latest doomsterism from the Alliance of World Scientists. It has lots of ideas, all bad.

In a paper published in Bioscience, a group of scientists led by veteran Oregon State University bioactivist William Ripple call for a new global economic model to save us from hell on earth. “By failing to adequately limit population growth, reassess the role of an economy rooted in growth, reduce greenhouse gases, incentivize renewable energy, protect habitat, restore ecosystems, curb pollution, halt defaunation, and constrain invasive alien species, humanity is not taking the urgent steps needed to safeguard our imperilled biosphere.”

The statement, released in November under the headline “World Scientists’ Warning to Humanity: A Second Notice,” has allegedly been signed by more than 15,000 “scientists,” although a large number of the signators list “student” as a credential.

The notice is a follow up to a similar call for action issued by the Union of Concerned Scientists 25 years ago, a call filled with anxious warnings that rising population levels are stretching world resources to the limit. “No more than one or a few decades remain before the chance to avert the threats we now confront will be lost and the prospects for humanity immeasurably diminished.”

Will these doomsters never learn? Here we are, going on three decades later, and the world’s population is healthier, better fed, less poor, better entertained and generally living fuller lives than 25 years ago — and there’s no end in sight. Technology, creativity, individual ingenuity, entrepreneurship, science, innovation, and individual drive under improved governance structures continue to raise human living conditions around the word.

However, despite man’s ongoing triumph and achievement, the population and environmental alarmists keep on bombing. And they keep getting it wrong, wrong and wronger.

Perhaps the best-known modern bomber is Stanford University’s Paul Ehrlich. This year will mark the 50th anniversary of the publication of Ehrlich’s 1968 book, The Population Bomb, a best-seller that fired up a generation of hippies, activists, Earth Day movements, green activists and marches to demand population control and a major overthrow of the world economic system to allow more government intervention to limit growth and prevent disaster.

In The Population Bomb, Ehrlich provided a near-endless stream of extreme predictions that turned out to be catastrophically wrong. A typical sample: “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.”

Ehrlich is still alive and still making extreme predictions, although he is taken less seriously today and is often the target of humour attacks.
The intellectual foundation to Ehrlich’s ideas, however, are no joke. University of Toronto geography professor Pierre Desrochers, in a 2009 paper, traced what he refers to as “the intellectual roots” of The Population Bomb. The obvious starting point is the work of Thomas Malthus, the 18th-century British intellectual who claimed that population would outgrow the ability of the economy to produce food. Therefore, population must be controlled.

By the early 20th century, writes Desrocher, Malthusian ideas had been taken over by eugenicists and others who came to believe that the planet is a place of limited resources whose exploitation must be curtailed. Even the godfather of scientific corporate management, Frederick Winslow Taylor, in 1909 joined the earth-is-doomed movement. If action is not taken, said Taylor, “We can see our forests vanishing, our water-powers going to waste, our soil being carried by floods into the sea; and the end of our coal and our iron is in sight.”

Today, 110 years later, with coal nowhere near its end and food production per capita constantly expanding, the same doomster claims are being produced, usually wrapped in economic and political ideas that aim to overthrow the market system that has helped achieve what doomsters from Malthus to Ehrlich and Al Gore claimed was impossible. Food supply, said Malthus, could never keep up with population growth, a prediction that was based on basic ignorance of the power of human ingenuity and innovation, of free markets and international trade.

Even the UN-backed Food and Agricultural Organization says a 2050 world population of nearly 10-billion (up from 7 billion today) could be fed. “Meeting the increased demand should not be a major challenge, if past achievements are a guide. Historically, much bigger increases in agricultural production have been recorded in comparable time frames.” Between 1961 and 2011, says the FAO, global agricultural output more than tripled. “In low-income countries, livestock production has been one of the fastest growing agricultural subsectors. Since the early 1970s, per capita consumption of milk, dairy products and vegetable oils has almost doubled.”

In this year 2018, the end is not near. The only people in need of downsizing are the predictors of doom and other purveyors of science fiction.

2) U.S. Shale Oil Production Booms As New Year Begins
The Washington Post, 31 December 2017
Thomas Heath

U.S. crude oil production is flirting with record highs heading into the new year, thanks to the technological nimbleness of shale oil drillers.



The current abundance has erased memories of 1973 gas lines, which raised pump prices dramatically, traumatizing the United States and reordering its economy. In the decades since, presidents and politicians have made pronouncements calling for U.S. energy independence.

President Jimmy Carter in a televised speech compared the energy crisis of 1977 to “the moral equivalent of war.”

“It’s a total turnaround from where we were in the ’70s,” said Frank Verrastro, senior vice president at the Center for Strategic and International Studies.

Shale oil drills can now plunge deep into the earth, pivot and tunnel sideways for miles until they hit an oil pocket, Verrastro said.

The United States is so awash in oil that petroleum-rich Saudi Arabia’s state-owned oil and natural gas company is reportedly interested in investing in the fertile Texas Permian Basin shale oil region, according to a report last month.

That is a far cry from the days when U.S. production was on what was thought to be an irreversible downward path.

“For years and years, we thought we were running out of oil,” Verrastro said. “It took $120 for a barrel of oil to make people experiment with technology, and that has been unbelievably successful. We are the largest oil and gas producer in the world.”

Full story

3) UK Shale Development To Begin In Earnest In 2018
Steel Guru, 28 December 2017

UK shale gas companies are expected to launch large-scale fracking of gas in the northern English counties of Yorkshire and Lancashire in 2018 amid protests of environmentalists against the authorities’ decision to grant permission for such activities.



Mr Francis Egan CEO of Cuadrilla company said in relation to the start of fracking in the United Kingdom, “We will see results next year. None of us can say with certainty what the results will be, of course.”

The corporate affairs director of the IGas company Ann-Marie Wilkinson, said that the upcoming year will be crucial for the shale gas industry in the United Kingdom.

Wilkinson said that “In terms of moving the industry forward, it [2018] is very significant. The most important thing is to demonstrate it can be done safely and environmentally safe, and bring communities along with us.”

Full story

4) Shale Revolution Helps Rewrite The Global Geopolitical Playbook 
Asia Times, 5 November 2017
Joseph S Nye

In 2008, when the United States’ National Intelligence Council (NIC) published its volume Global Trends 2025, a key prediction was tighter energy competition. Chinese demand was growing, and non-OPEC sources like the North Sea were being depleted. After two decades of low and relatively stable prices, oil prices had soared to more than $100 US a barrel in 2006.

Many experts spoke of “peak oil” — the idea that reserves had “topped off” — and anticipated that production would become concentrated in the low-cost but unstable Middle East, where even Saudi Arabia was thought to be fully explored, with no more giant fields likely to be found.

The US was regarded as increasingly dependent on energy imports, and this, together with rising prices, was seen as a major limit on American geopolitical influence. Power had shifted to the producers.
The NIC analysts did not neglect the possibility of a technological surprise, but they focused on the wrong technology. Emphasizing the potential of renewables such as solar, wind, and hydro, they missed the main act.

The real technological breakthrough was the shale-energy revolution. While horizontal drilling and hydraulic fracturing (fracking) are not new, their pioneering application to shale rock was. By 2015, more than half of all the natural gas produced in the US came from shale.

Shale turns the table on US energy dependence

The shale boom has propelled the US from being an energy importer to an energy exporter. The US Energy Department estimates that the country has 25 trillion cubic meters of technically recoverable shale gas, which, when combined with other oil and gas resources, could last for two centuries.

The International Energy Agency now expects North America to be self-sufficient in energy in the 2020s. Facilities built to receive liquefied natural gas (LNG) imports have been converted to process exports.

World markets have also been transformed. Previously, gas markets were geographically restricted by dependence on pipelines. That gave market power to Russia, which used it to exercise political and economic leverage over its European neighbors. LNG has now added a degree of flexibility to gas markets and reduced Russian leverage. In 2005, only 15 countries imported LNG; today, that number has tripled.

Moreover, the smaller scale of shale wells makes them much more responsive to fluctuations in market prices. It is difficult to turn on and off the billion-dollar multiyear investments in traditional oil and gas fields; but shale wells are smaller, cheaper, and easier to start and stop as prices change. This means that the US has become the so-called swing producer capable of balancing supply and demand in global hydrocarbon markets.

US energy abundance has broad implications

As Harvard University’s Meghan O’Sullivan points out in her smart new book Windfall, the shale revolution has a number of implications for US foreign policy. She argues that the new energy abundance increases US power. Shale-energy production boosts the economy and creates more jobs. Reducing imports helps the balance of payments. New tax revenue eases government budgets. Cheaper power strengthens international competitiveness, particularly for energy-intensive industries like petrochemicals, aluminum, steel, and others.

There are also domestic political effects. One is psychological. For some time, many people in the US and abroad have bought into the myth of American decline. Increasing dependence on energy imports was often cited as evidence. The shale revolution has changed that, demonstrating the combination of entrepreneurship, property rights, and capital markets that constitute the country’s underlying strength. In that sense, the shale revolution has also enhanced American soft power.

Skeptics have argued that lower dependence on energy imports will cause the US to disengage from the Middle East. But this misreads the economics of energy. A major disruption such as a war or terrorist attack that stopped the flow of oil and gas through the Strait of Hormuz would drive prices to very high levels in America and among our allies in Europe and Japan. Besides, the US has many interests other than oil in the region, including nonproliferation of nuclear weapons, protection of Israel, human rights, and counterterrorism.

Great expectations, uncertain outcomes

The US may be cautious about overextending itself in the Middle East, but that reflects its experience with the costly invasion of Iraq and the general turmoil of the Arab Spring revolutions, rather than illusions that shale produces political “energy independence.”

America’s ability to use oil sanctions to force Iran to negotiate an end to its nuclear-weapons program depended not only on Saudi willingness to make up Iran’s exports of a million barrels a day, but also on the general expectations that the shale revolution created.

Other benefits of shale energy for US foreign policy include the diminishing ability of countries like Venezuela to use oil to purchase votes at the United Nations and in regional organizations of small Caribbean states, and Russia’s reduced ability to coerce its neighbors by threatening to cut off gas supplies. In short, there has been a tectonic shift in the geopolitics of energy.

Full post

5) Green Madness: Russia’s Grip On Anti-Shale Europe Tightening
OilPrice.com, 1 January 2018

Despite years of effort from the EU, Russia’s grip over natural gas supplies in Europe is tightening, not waning.



Gazprom shipped 190 billion cubic meters of natural gas to Europe in 2017—a record high, according to Bloomberg. In 2018, that figure is expected to dip slightly to 180 billion cubic meters, which will still be the second most on record.

The higher reliance on Russian gas may come as a surprise, not least because of the ongoing tension between Russia and some European countries on a variety of issues. Russia’s intervention in Ukraine and its annexation of Crimea in 2014 led to a standoff between Russia and the West—but Europe’s imports of Russian gas are up more than 25 percent since then, despite a lot of rhetoric in Brussels about diversification.

There has been some progress. U.S. LNG has begun arriving on European shores for the first time, promising to compete with Russian gas. Importing LNG has been a lifeline particularly in some areas that are acutely exposed to Russia’s gas grip. Lithuania began importing LNG, offering an alternative to Russian gas and forcing price concessions from Gazprom.

For years, U.S. LNG has been billed as somewhat of a game changer, threatening to end Russia’s control of the European market. There have been some notable concessions from Gazprom—more flexible pricing, for example, and an erosion of oil-indexed pricing — but the Russian gas giant has not lost market share. A lot of U.S. LNG has been shipped to Latin America, not Europe.

Part of the reason is that European natural gas production continues to fall, leaving a void that Russia has been eager to fill.

Full story

6) Christopher Booker: No, Wind Power Is Not The Cheapest Form Of Energy
The Sunday Telegraph, 31 December 2017

A weird propaganda blitz, widely publicised again last week, is trying to persuade us that the cost of power from wind farms has been “tumbling” so fast that wind has now replaced coal as our “cheapest” source of electricity.

This began in October when Greenpeace and various wind companies plastered Westminster Underground station, the one most used by MPs, with posters claiming that the cost of offshore wind had halved in the past five years. This was so laughably untrue that the Global Warming Policy Forum (GWPF) complained to the Advertising Standards Authority (ASA) that the claim was based only on figures that include “tentative future wind projects” that might not even be built.

Last week, the ASA emailed the GWPF to say that Greenpeace has now agreed not to repeat its claim; which means that the ASA does not now have to issue a formal ruling that this boast was bogus. In fact, official figures show that, far from falling, the price we all pay for offshore wind electricity can be up to £161 per megawatt hour, three-and-a-half times the current wholesale market rate. In the next four years, our offshore subsidy bill is due to more than double, from £1.4 billion a year to £3.1 billion.

As for the further boast that on 263 days this year wind contributed more electricity than coal, this is hardly surprising; the Government has been doing all it can with regulations and “carbon taxes” to close down our coal-fired power stations, which until two years ago were still supplying 30 per cent of our electricity.

Yet on the coldest night of the year, two weeks before Christmas, those few coal plants that remain were still having to supply around 20 per cent of our needs, with nearly 50 per cent more coming from gas, the other fossil fuel that the Government wants to see phased out. Even this year there were times on windless days when all our 8,140 wind turbines – put together earning billions in subsidies – contributed barely one per cent to our needs.

So if we still have to rely on those hated fossil fuels when the wind isn’t blowing, how can we guarantee that our lights will stay on when they are gone? The only response we get from those propagandists is that they want even more  subsidies for “renewables”.

7) John Constable: Policy Determinism And Reform Of The International Energy Agency
GWPF Energy, 1 January 2018
Dr John Constable: GWPF Energy Editor

The International Energy Agency (IEA) is rapidly becoming an uncritical part of the international climate policy engine. This helps no one in the longer run. To ensure continued relevance the Agency should return to its empirical, data-heavy roots, and remind politicians and civil servants that energy and climate policies are hypotheses about the world, and, as with all hypotheses, may be mistaken.

Just under two years ago I commented on Sir David King’s prominent request that “defossilisation” should be “reflected in the way the International Energy Agency works”. Hoping for the best, I expressed the hope that:

“Dr Birol and his colleagues at the IEA are not intimidated by such a strangely threatening remark, but strive to fulfil their duties to the taxpayers of the OECD, who provide their funding, by offering objective and fearless comment on the policies that are proposed by the member governments.”

“The last thing”, I added, “that any sensible person would want, though Sir David appears mistakenly to desire it, is for the IEA to become yet another servile element in the policy delivery mechanism.”

Dr Birol had been Director at the IEA for only a few months at that time, and there was still reason to think that he would use his new found liberty as director to strengthen the organisation’s analytical independence, rather than otherwise.

Perhaps unsurprisingly, this has not happened, and the hallmark of his tenure so far is, first and foremost, an attempt to guarantee the institutional future of the IEA. […]

The downside of this charm offensive is that the IEA’s commentary, of which its World Energy Outlook (WEO) is the key vehicle, now seems to lack bite or critical edge. In trying to please its current members, and in an effort to win further supporters, the International Energy Agency is slipping towards an anodyne and uncommitted style. […]

However, as the World Energy Outlook shows at every turn, the IEA has become a deliberately and happily irresponsible spinner of pretty scenarios born of the beautiful polices of its subscribing members. To regain relevance, the organisation desperately needs to return to its empirical and data-heavy roots, and stake its reputation on the delivery and foregrounding of facts, however ugly and unwelcome.

Full post

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.

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